SC: Consumers Can't Be Charged for Unused Services

On 7th May 2026, the Supreme Court ruled that consumers cannot be made to pay for services they no longer receive.

Key Points

Supreme Court Verdict: A bench of Justices set aside an order of the Appellate Tribunal for Electricity (APTEL).
Consumer Protection Principle: The Court stated that consumers cannot be charged for electricity services after supply has ceased.
Tariff Determination: The judgment described tariff fixation as a “regulatory balancing act” rather than a purely mathematical exercise.
Case Background: The dispute involved recovery of capital costs of the Rithala Combined Cycle Power Plant in Delhi through depreciation charges.
APTEL Order Overturned: APTEL had earlier directed that the full capital cost be recovered over a 15-year period through tariff depreciation.
DERC Position Upheld: The Supreme Court restored the order of the Delhi Electricity Regulatory Commission (DERC), which limited depreciation recovery only until electricity supply ended in March 2018.
Power Purchase Agreement (PPA): The Court noted that the plant was approved to supply electricity for only six years under the PPA.
Electricity Act Reference: The judgment highlighted Section 61(d) of the Electricity Act, 2003, which prioritises safeguarding consumer interests alongside reasonable cost recovery.
Judicial Significance: The ruling strengthens consumer rights in utility regulation and reinforces that tariff mechanisms must align with actual service delivery.